How to Invest in Change as a Venture Capitalist
RSVP for April 24th
Discover the power of Decile Hub, the leading AI-powered platform for VC firms.
RSVP for April 17th
3

Asked by

Community Member

on

in

Accounting & Taxes

Clawbacks and Cornerstone LPA 2.0

With respect to a Cornerstone LPA 2.0 agreement; under what conditions would partners in a venture capital fund give back up to 20% of distributions to satisfy [fund] obligations?
1 See in Base
0

Answered by

Haw Kuo

on

Clawbacks would be very unusual - here are two examples of situations in which the Fund may need to claw back distributions to satisfy the Fund's obligations (but this is by no means all-inclusive):

  • If proceeds have been over-distributed, particularly in a fund with "deal by deal" distribution; or
  • In lawsuits where the Fund must indemnify. 

Please now refer to Cornerstone V3: https://govclab.com/2024/02/04/cornerstone-lpa-v3/

Join the Leaders of Venture 2.0

Our graduates are creating disruptive capital with exceptional expertise, ethical investing practices, and exceptional returns. Whether you're launching your first fund or scaling an established firm, VC Lab provides the tools, network, and support needed to succeed in today's venture landscape.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?